It's a nice way to pump a 2500x return for yourself and investors before any exchange listing. Can't wait for the SEC to endorse that behavior across the ecosystem. /sarcasm
"Why were Stacks Tokens valued/sold at $0.00012 prior to the 2017 accredited sale at $0.12? Founders and early employees of Blockstack PBC received tokens at $0.00012 per token in October 2017 based on an independent valuation from Foresight Valuation Group, LLC when the Stacks Token was still in its earliest stage of development and before the publication of the token white paper at the end of that month. This grant was subject to a three-year time lock commencing upon the introduction of the genesis block to the Blockstack network in November 2018, and the nominal price reflected the early, high-risk support of founders and early employees.
Holders of Blockstack's Series A convertible preferred stock who had invested a total of $5.1 million as of late 2016 and funded Blockstack's early growth and development before the decision to create a token, or the drafting or publication of any white papers—were also provided an opportunity to purchase tokens at the $0.00012 per token price. This opportunity to participate at a nominal price was given in return for their early support and in proportion to their equity ownership, and it was based on their reasonable expectation as early investors that they would receive tokens if Blockstack ever decided to create a digital token. These tokens are subject to a three-year time lock, commencing upon the introduction of the genesis block to the Blockstack network in November 2018."
Now more context here:
I purchased my shares in Blockstack PBC in 2013 for $42, as does any other startup founder. Will I get a 23809x return if I sell my shares for 1,000,000? No, I'm earning these by the 5+ years of work and no reasonable person would assume that it's a 23809x return. The grant is "free" or at "$0" and the $42 number (standard practice in startups) is there for a tax cost basis.
Exact same logic applies to founder/employee token grants, as we structured our token grants after equity grants.
We did not sell "discounted tokens" at $0.12. That was the price the market was able to bear in Fall 2017. If you consider that a "Series A" price. A 2.5x multiple for a "Series B" is, again, totally standard and rather at the low end for traditional startups. Same thing applies here.
Finally, we are disclosing all this information so investors can make informed decisions. Not the standard practice in other token offerings. I believe disclosures and transparency is a good thing and that's why we took this approach and worked with regulators.
My one request would be to view this from a "what would it look like in a traditional startup?" angle vs. a "how is this project trying to scam me with a pyramid scheme?" angle. Thank you!
This is great, and I plaud that. I also think you guys are genuinely trying to be honest here.
Unfortunately, a sane level of skepticism (and sarcasm) has to be expected, in general, especially here on Hacker News.
plaud
To applaud.
n. Claim to applause; plaudit; applause.
transitive verb To applaud.1. The $.00012 token kickers constitute 1/4th of the entire supply. That's a 2500x return when sold at the .30c price or even more going by the current OTC price.
2. The market was in a full blown mania in fall 2017 so a market barely out of a crushing crypto winter can somehow support a higher .30c price now vs .12c back then?
Union Square Ventures, myself, and my co-founder are one of the largest holders of such tokens. We have restrictions from the SEC on selling these on the open market (given >5% ownership of Blockstack PBC). Restrictions which are also disclosed in the offering circular. Happens all the time with IPOs.
Your greed is showing, Muneeb.
Plenty of posters in this thread talk about "following you" since the beginning and having lovely things to say about your product. Truth is: There is nothing your product does that other decentralized services didn't already do, for free. Your ID service is a less-secure Sovrin and your storage is a gated IPFS.
You just saw what Ethereum did and wanted a piece of the pie for yourself.
"Happens all the time with IPOs" refers to restrictions on significant holders and company affiliates to sell. Which I believe is a good thing.
Blockstack pre-dates Ethereum and is the exact opposite of Ethereum in terms of tech design. This is a regulated token offering which is very different from what Ethereum did. Doing what Ethereum did i.e., "ICO", in my view, is a much easier but legally risky path.
Love what Sovrin is doing. Blockstack pre-dates Sovrin by a couple of years. We've worked on the Decentralized Identity Foundation (DIF) with them.
I don't understand your IPFS comment, can you please elaborate? Gaia provides blockchain-pointers to private data lockers, IPFS is p2p storage. You can actually plugin IPFS as a storage option with Gaia, driver here: https://github.com/blockstack/gaia/pull/129/files